An addition product of an epoxy compound selected from the group consisting of ethylene oxide, propylene oxide and glycidol with a reaction product of .epsilon.-caprolactam with an N-alkylalkylenediamine of the formula ##EQU8## wherein R is selected from the group consisting of alkyl having 8 to 18 carbon atoms, hydroxyalkyl having 8 to 18 carbon atoms, alkenyl having 8 to 18 carbon atoms, hydroxyalkenyl having 8 to 18 carbon atoms, alkadienyl having 8 to 18 carbon atoms, alkatrienyl having 8 to 18 carbon atoms, and mixtures of alkyl derived from fatty acid mixtures having 8 to 18 carbon atoms, R.sub.1 is a member selected from the group consisting of hydrogen and alkyl of 1 to 4 carbon atoms, and n is the integer 3, with the molar ratio of N-alkylalkylenediamine to .epsilon.-caprolactam ranging from 1:1 to 1:10, said reaction being carried out for 3 to 20 hours in the liquid phase at temperatures above 180.degree.C to produce said reaction product, and then reacting said reaction product with said epoxy compound where the amount of epoxy compound is selected so that the molar ratio between the N-alkylalkylene diamine charged in said reaction product to said epoxy compound ranges from 1:0.5 to 3 at a temperature of between 50.degree.C to 150.degree.C for a time effective to produce said addition product.